Revolut's 'Project Swan' moves forward with SoftBank share agreement

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Revolut's 'Project Swan' moves forward with SoftBank share agreement
Credit: © Reuters.

Revolut's "Project Swan" has made significant progress as the fintech firm negotiates a share agreement with SoftBank (TYO: 9984 )'s Vision Fund 2, reported by the Financial Times on Wednesday. This development marks a crucial step towards Revolut's pursuit of a UK banking license, necessitating the consolidation of six share classes into one.

The restructuring of Revolut's ownership is paramount to satisfy a critical condition set by the Bank of England for obtaining a UK banking license. As part of this process, preference shares held by investors, including SoftBank, will need to be merged. In the midst of this, SoftBank, who led a July 2021 fundraising round valuing Revolut at $33 billion, is seeking compensation for relinquishing its priority shares without the issuance of new 'top-up' shares.

In response to these developments, Revolut CEO Nikolay Storonsky has sought assistance from SoftBank CEO Masayoshi Son. This move comes amidst two and a half years of regulatory slowdowns that Storonsky criticized in City A.M. According to InvestingPro Tips, Storonsky's move could be seen as a strategic reaction to the company's current position of trading at a high P/E ratio relative to near-term earnings growth.

As Revolut awaits authorization from the Prudential (LON: PRU ) Regulation Authority, Companies House has extended the deadline for the fintech firm to file its annual results until December 2022. The Financial Conduct Authority is also involved in the licensing process.

Investors such as Tiger Global Management, TCV, Balderton Capital, and Ribbit Capital are currently considering merging their shares into one class. This consideration aligns with the ongoing efforts to unify Revolut's six share classes into one, a key requirement for obtaining its UK banking license.

InvestingPro's real-time metrics show that Revolut has a market cap of $5.3144 million and a P/E ratio of 14.4. The company's revenue for LTM2024.Q1 is reported to be $4.1445 million, with a growth of 4.98%. These figures underline the company's significant position in the fintech industry and the potential impact of its pursuit of a UK banking license.

For more insights and tips, such as the company's stock generally trading with low price volatility and being a prominent player in the Wireless Telecommunication Services industry, visit InvestingPro. It offers a wealth of additional tips and real-time metrics that can help investors make informed decisions.

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